Transform Rockford: South Carolina a company magnet; Illinois? Not so much

Sunday

Jun 15, 2014 at 5:00 AM

By Georgette BraunRockford Register Star

Union jobs are not welcome in South Carolina.

That’s what Gov. Nikki Haley told The Greenville News in February when she was in Greenville for an automotive conference. She said she is happy about the non-union jobs at BMW, Boeing and Michelin but would not like to see Ford, General Motors or Chrysler in her state.

Keith Summey, mayor of North Charleston, where Boeing employs more than 6,000 people and plans to add 2,000, told the Register Star that the governor’s anti-union stance — typical in Southern states — helps grow businesses and jobs. It lets businesses be more efficient.

South Carolina, where 15 percent of workers are in manufacturing, has the nation’s third-lowest rate of unionization.

Aside from being a right-to-work state, where employees can choose to be in a union or not, South Carolina offers other advantages to business.

Much of the incentive package that airplane maker Boeing is receiving for building a factory to manufacture Dreamliners in North Charleston came from the state.

Among the reason businesses are attracted to South Carolina, according to the SC Power Team:

n No state property tax. Local governments structure a negotiated fee with businesses instead of property tax abatements.

n Corporate income tax is 5 percent, one of the lowest rates in the Southeast.

n Job Development Credits offset the cost of locating or expanding a facility. Customized worker training program readySC recruits, screens, tests and trains prospective employees so they are ready to work on the first day of a company’s new operations, usually at no cost to the company.

n The state’s central location on the East Coast, midway between Miami and New York City, provides easy access to materials and markets.

n Competitive wages, low-cost, reliable electric power and the pro-business policies of state and local governments, coupled with low construction and land costs, result in low production costs for industry. Electric power in the state costs 13 percent less than the national average.

n More than 60 post-secondary schools offer the kind of support that business needs, with 16 technical colleges offering training and retraining opportunities and degree and certificate programs. In the Charleston metropolitan area, higher education institutions include Trident Technical College, the College of Charleston, Culinary Institute of Charleston, Charleston Southern University, the Medical University of South Carolina, The Citadel — The Military College of South Carolina, and Charleston School of Law.

n A comparatively low cost of living, affordable leisure and cultural activities, a temperate climate (an average of more than 200 days of sunshine a year) and proximity of ocean resorts and mountain retreats are among the quality-of-life factors that appeal to visitors and residents and the companies that employ them.

“Illinois does not rate well” as a business magnet, said Tom Gendron, chairman of Woodward Inc., which is building an airplane-parts-making facility in Loves Park. He also is chairman of the Transform Rockford effort to turn Rockford’s social and economic ills around by 2025.

Illinois’ unattractive business climate, he said, results from a “combination of regulations, approaches with labor, workers’ compensation, taxes, ability to get something done in terms of bureaucracy, the worst lawsuit environment.

“It’s a long list considered by companies.”

California, New York and Illinois were ranked as the three worst in 2014 in Chief Executive magazine’s 10th annual survey of CEO opinion of best and worst states in which to do business. More than 500 chief executive officers responded, grading states with which they were familiar on measures including tax and regulatory policies, workforce quality and quality of the living environment.

South Carolina ranked fifth best.

Even so, Woodward received incentives to build in Loves Park, where the company’s facility is expected to open in 2015.

The state agreed to give Woodward $45 million in corporate income tax credits, which are based on job creation and retention; $578,000 for job training; $3 million in capital grants for site improvements; and $500,000 to Loves Park for business development infrastructure that will go to the Woodward project.

Woodward is buying the 70-acre building site, but the company will get that money back over the years because the property was included in a tax increment financing district. The other bidding states were offering free land.

The $300 million plant is expected to employ about 1,500 people within a decade. The Fort Collins, Colorado-based company was originally based in Loves Park and employs about 1,500 workers there and in Rockton.